Hyatt has entered into a definitive agreement to acquire luxury resort-management services, travel and hospitality company, Apple Leisure Group (ALG), from affiliates of of KKR and KSL Capital Partners, LLC for US$2.7 billion.
ALG’s resort brand management platform AMResorts provides management services to the largest portfolio of luxury all-inclusive resorts in the Americas under the AMRTM Collection brand portfolio, including brands Secrets Resorts & Spa, Dreams Resorts & Spas, Breathless Resorts & Spas and Zoëtry Wellness & Spa Resorts as well as Alua Hotels & Resorts brand, which is expanding in European leisure destinations.
The acquisition will expand Hyatt’s presence in luxury leisure travel and immediately add approximately 100 hotels and a pipeline of 24 executed deals in Europe and the Americas to its portfolio. Following completion of the transaction, Hyatt will offer the largest portfolio of luxury all-inclusive resorts in the world, will double its global resort footprint, will be the largest operator of luxury hotels in Mexico and the Caribbean, and will expand its European footprint by 60 percent.
The acquisition will extend Hyatt’s brand footprint into 11 new European markets, greatly enhancing Hyatt’s growth potential in Europe, a critical region for global growth in leisure travel.
The arrangement also includes ALG’s membership offering, Unlimited Vacation Club, leisure travel distribution platforms, ALG Vacations, as well as destination management services, Amstar, and travel technology assets, Trisept Solutions.
Further, Hyatt will determine ways in which World of Hyatt and Unlimited Vacation Club (ALG’s exclusive travel club with over 110,000 members) can bring added value and unique loyalty benefits to their member bases while benefitting hotel owners.
Following the completion of the transaction, ALG’s business will continue to be led by current ALG CEO Alejandro Reynal and the current ALG leadership team. Reynal will become a member of Hyatt’s executive leadership team and report to Hyatt CEO Mark Hoplamazian.
“With the asset-light acquisition of Apple Leisure Group, we are thrilled to bring a highly desirable independent resort management platform into the Hyatt family,” said Mark Hoplamazian, President and Chief Executive Officer, Hyatt.
“The addition of ALG’s properties will immediately double Hyatt’s global resorts footprint. ALG’s portfolio of luxury brands, leadership in the all-inclusive segment and large pipeline of new resorts will extend our reach in existing and new markets, including in Europe, and further accelerate our industry-leading net rooms growth.
“Importantly, the combination of this value-creating acquisition and the $2 billion increase in our asset sale commitment will transform our earnings profile, and we expect Hyatt to reach 80% fee-based earnings by the end of 2024.”
ALG’s hotel portfolio consists of over 33,000 rooms operating in 10 countries. The portfolio has grown from nine resorts in 2007 to approximately 100 properties by the end of 2021 and has a pipeline of 24 executed deals with a large number of additional hotels in the development process.
“Combining Hyatt’s deep expertise and global brand footprint with ALG’s strong resort brands, operating capabilities and robust development plans will elevate our differentiated position and create a leader in luxury leisure travel,” said Alejandro Reynal, Chief Executive Officer, Apple Leisure Group.
“I am excited to have our team join the Hyatt family and I anticipate a robust growth journey ahead as the industry expands and we are able to provide a best-in-class leisure offering to an even larger group of travelers around the world,” Reynal added.
To help fund the deal, Hyatt anticipates fulfilling its current commitment to sell US$1.5 billion of hotel real estate in 2021, resulting in a total of over US$3 billion of proceeds realised since the asset-sale strategy was announced in 2017. Hyatt is further committing to an additional US$2 billion in proceeds from the sale of hotel real estate by the end of 2024.
The transaction is anticipated to close in Q4 2021, subject to customary closing conditions.